A surprising number of people assume that if a car is still financed, it's simply off the table until the loan is fully paid — so they keep making monthly payments on a vehicle that's barely running, or has already been in an accident, just because they don't realize there's a way out. There is, and it's a fairly standard process here.
The registration card already reflects the loan
In the UAE, when a car is financed, the bank is typically listed as the mortgagee on the Mulkiya. This isn't a red flag — it's just how vehicle finance works here, and any legitimate buyer will expect to see it. It simply means one extra step is involved before ownership can be transferred.
You'll need a liability letter from your bank
This is a document confirming the exact outstanding amount owed on the loan. You can usually request it directly from your bank's customer service or your relationship manager, and it typically takes a few days to be issued. Some banks provide it instantly through their app or online banking portal, others require a branch visit — worth checking early so it doesn't hold up your sale.
Settlement happens before, or as part of, the transfer
There are generally two ways this plays out. Either you settle the outstanding loan amount yourself (using the cash from the sale, or from savings) and get a clearance letter, then proceed with a normal ownership transfer — or the buyer's payment is structured so that part of it goes directly toward clearing the loan with the bank, and you receive the remaining balance. A serious buyer will walk you through which approach they're comfortable with; both are common.
The RTA won't transfer ownership with an active mortgage on file
This is the part people sometimes miss. Even if you and the buyer agree on a price and shake hands, the vehicle legally cannot change hands at the RTA until the bank's mortgage is cleared and reflected in their system. Skipping this step doesn't just cause paperwork headaches later — it means the sale isn't actually complete in the eyes of the law.
What if the car is worth less than what's still owed?
This does happen, particularly with vehicles that depreciate quickly or have higher damage. In this situation, you'd need to cover the shortfall between the loan balance and what the buyer is offering, out of pocket, to fully clear the loan and complete the transfer. It's worth doing this math honestly before assuming a sale will fully solve a financial situation — sometimes it helps, but doesn't fully close the gap.
A simple way to think about the sequence
- Request a liability/settlement letter from your bank showing the exact amount owed
- Agree on a sale price with your buyer
- Settle the loan (either directly, or coordinated through the sale proceeds)
- Get the mortgage cleared and removed from the Mulkiya
- Complete the RTA ownership transfer as normal
None of this is unusually complicated, but it does take slightly longer than selling a car with no finance attached — so it's worth starting the liability letter request as soon as you decide to sell, rather than after you've already found a buyer and are ready to move quickly. If you're mid-loan and wondering whether it's even worth exploring a sale, it usually is — the loan doesn't need to be finished for the process to start.
